NEW YORK - Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange-traded fund backed by gold as prices posted the largest quarterly drop since 2008.
Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a United States Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co increased its holdings by 26 per cent to 21.8 million shares.
Gold slumped 4 per cent in the second quarter, the biggest such loss since Sept 30, 2008. Prices fell as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S Bernanke failed to increase stimulus measures, damping the outlook for global growth and demand for the metal as a hedge against inflation. The price is down 0.1 per cent since June 30.
"It's all about easing, and people are waiting for the Fed since investors expect prices will rise," if the central bank announces more bond purchases, said Mr Walter "Bucky" Hellwig, who helps manage US$17 billion (S$21.2 billion) of assets at BB&T Wealth Management in Birmingham, Alabama. "People are willing to hold on to gold to see what the Fed will say."
The metal surged 70 per cent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought US$2.3 trillion of debt in two rounds of so-called quantitative easing. Gold erased its gains this year in May as investors favored sovereign debt and the dollar as economic growth slowed.
Spokesmen for Mr Paulson and Mr Soros declined comment. BLOOMBERG
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